Items on purchases with status Preorder - Unpaid or Unpaid. They are not on hand yet. When a purchase is marked Paid, Shipped or Completed, its items move into Inventory automatically.
Things the business buys but doesn't resell: shipping and office supplies, equipment, software, fees, taxes and filings. They are purchase line items not tracked in inventory, so they never appear in Inventory. They still show on the Transactions tab, marked Expense.